Chinese stock markets tumbled on Monday after US President Donald Trump threatened new tariffs on China, putting a trade deal in doubt.
He said on Twitter the US would more than double tariffs on $200bn (£152bn) of Chinese goods on Friday and would introduce fresh tariffs.
Recent comments had suggested both sides were nearing a trade deal.
A Chinese delegation was due to travel to Washington this week for talks aimed at ending the trade war.
US media has reported that China is now considering cancelling those talks, that were scheduled to resume on Wednesday.
Some reports said the Chinese were due to send a 100-person delegation to the negotiations, led by Vice-Premier Liu He.
The Chinese government has yet to officially comment on Mr Trump's tweets.
In China, Hong Kong's Hang Seng index dropped 3.7%, while the Shanghai Composite plunged 5.3%.
US stock futures pointed to a lower open on Wall Street.
Michael Hirson, Asia director at Eurasia Group, said: "His [Mr Trump's] move injects major uncertainty into negotiations, which now face a rising risk of an extended impasse – perhaps even through the US presidential election."
What did Mr Trump say?
The US president tweeted that tariffs of 10% on certain goods would rise to 25% on Friday, and $325bn of untaxed goods could face 25% duties "shortly".
"The Trade Deal with China continues, but too slowly, as they attempt to renegotiate. No!" he tweeted.
After imposing duties on billions of dollars worth of one another's goods last year, the US and China have been negotiating and in recent weeks, appeared to be close to striking a trade deal.
Last week US Treasury Secretary Steven Mnuchin described talks held in Beijing as "productive".
White House economic adviser Larry Kudlow told Fox News that the president's tweet was a warning.
"The president is, I think, issuing a warning here, that, you know, we bent over backwards earlier, we suspended the 25% tariff to 10 and then we've left it there.
"That may not be forever if the talks don't work out," he said.
Is the deal over?
So far, the US has imposed tariffs on $250bn of Chinese goods, having accused the country of unfair trade practices.
Beijing hit back with duties on $110bn of US goods, blaming the US for starting "the largest trade war in economic history".
According to reports, in recent days US officials have become frustrated by China seeking to row back on earlier commitments made over a deal.
Sticking points have included how to enforce a deal, whether and how fast to roll back tariffs already imposed and issues around intellectual property protection.
Tom Orlik, chief economist at Bloomberg Economics, saRead More – Source